UBS: Record Libor Fine, Criminal Charges, and Devastating Q4 Losses

UBS (NYSE:UBS) is finally taking its blows over the Libor rigging. The bank has settled with a $1.5 billion fine, representing the largest fine yet over the interest rate rigging.

Not only has the bank been getting dealt with on the anti-trust end of the law, it has been hit with criminal charges for wire fraud, making it the first big bank in a decade to agree to criminal charges. The guilty plea comes from a UBS subsidiary in Japan, where it is suspected most of the Libor rigging took place.

One of the core components of our CHEAT SHEET Investing Framework focuses on catalysts that will move a company’s stock.

UBS coming clean over the Libor scandal and supposedly turning over a new leaf might have been the best way to save face and instill confidence going forward, while the agreed $548 million for restructuring could improve future operations, but with an expected $2.7 billion net loss for Q4, shares are likely to take a hit. Also, simple statements on the matter from UBS staff might not be enough to wash clean the bank’s soiled reputation.

Other banks involved in the Libor and other rate-rigging scandals may face dropping shares if investors worry that the banks could also be facing steep fines and net losses.